The automotive aftermarket, as a whole, has been cautious about deploying new technology in the past few years. But as data standards have solidified, a number of distributors have made technology and e-commerce a key part of their strategic vision.

The Aftermarket Auto Parts Alliance has used e-commerce technology, in concert with embracing industry data standards, to help improve the efficiency and accuracy of its entire supply chain. Now, the company is beta testing a new business-to-business solution with eight of its members that will provide "one face to the service dealer," says Dale Hopkins, vice president of information technology at the Alliance. "Right now our members might be running IAP, ePart or NextPart or some other solution, and in some cases they're even using multiple applications. From a support standpoint, it's a nightmare."

The San Antonio-based Alliance is one of the largest parts distributors in the world (doing nearly $5 billion in sales last year in North America alone), and has applied some of the same principles and economies of scale to its technology infrastructure that have made its purchasing and distribution operations so effective.

While the Alliance outsources several of its applications, the new B2B solution will be a homegrown system. "There wasn't a packaged solution that offered all that we needed from the system," Hopkins says. "This system will provide that single view to the service dealer, and consolidate all of the information the installer needs in one place. It will also enable us to provide a more current look and feel that's consistent with what our members have told us they want."

Hopkins, who serves on the AAIA Technology Standards Committee, has seen both sides of these types of technology implementations, having previously worked for i2 Technologies and CCI/Triad (now Activant), as well as managing stores for a large warehouse distributor. He recently outlined the Alliance's e-commerce and technology approach at the MEMA Information Services (MIS) Council this past fall.

Collaborative Approach

The 53 independent shareholders who make up the Alliance aren't under obligation to use the group's technology solutions, which Hopkins says provides extra onus to make sure there is a clear value to any technology that the Alliance offers its members.

"We readily involve them in the design of the systems," Hopkins says. "Any time you deploy a new solution, you will have some difficulties, and the main reason is resistance to change. If you already have a solution, why would you need a new one? It has to be overwhelmingly advantageous for them to deploy something new."

Hopkins says that individual members also provide new ideas that can be shared with the entire group. A good example is the Alliance Total EDI Solution, which allows members to communicate product and order information with any vendor through the Alliance's online gateway.

"The problem we had to solve there was that the manufacturers and vendors have different technology platforms and EDI capabilities, and our Alliance members also have disparate business management systems and capabilities," Hopkins says. "We had to come up with a solution that allowed any member or any vendor to communicate, regardless of their platform.

Vendors and members can now send files in any format, and the data is mapped using a solution from GCommerce, working in concert with Activant. Members and partners also have the option of exchanging EDI documents directly using the AAIA PARTnerShip Network.

The EDI solution was originally proposed by Bond Auto Parts, and went live in 2007. There are now 137 vendor partners and 42 alliance members participating.

The Alliance has also embraced industry standards like ACES and PIES. "We are big supporters of the standards. We are starting to drive down to the detail of what specific fields will be required in PIES for our vendors to supply data to us, and we're working on getting standard part numbers that can be used between us and our vendors," Hopkins says. "Synchronization is huge for us, and for the industry at large."

The overall goal is for e-catalogs to be as timely, accurate and complete as possible.

"The big challenge with eCats is related to timeliness and completeness," Hopkins says. "In order to be complete by our definition, every single part number a vendor offers for sale must be available in the e-catalog. Timeliness is another issue. The challenge I issued at the MIS Council meeting was for vendors to deliver all new changed and corrected catalog data throughout our entire supply chain within 15 minutes of being released."

Hopkins realizes that such speed is not currently possible—but it should be within the next 12 to 18 months. "The only way that we can make that happen is if we all work together, vendors and distributors alike, in collaboration," Hopkins says.

That means that not only must manufacturers make the data available, but distributors have to have a way to push that information across all levels of their operations.

"It's a huge problem," Hopkins says. "If you go look at what's in your inventory and bounce that against what's in the eCat, you will be alarmed. It's generally in the 50 percent to 60 percent range."

The Payoff

Although the shaky economy has put technology initiatives on hold at other aftermarket companies, Hopkins says that the Alliance plans to move ahead at full steam with its new B2B system, as well as an inventory optimization system currently in development.

"Our management has said that we have to take advantage of these opportunities," Hopkins says. "Our CEO, Richard Morgan, and our Board, are fully behind our continued investment in IT."

That's only possible with a clear return on investment (ROI), however. "If there's not a payback, then it's not worth doing," Hopkins says. "In each case, we know what the return is for us, in terms of savings across the entire supply chain, including for our members and our vendors. Purely from a business perspective, everything needs to carry its own weight."